by Jim Fausone
Upon the death of a service member, his or her family is entitled to death benefits from service life insurance. The financial press recently broke the story that Prudential Financial did not pay the lump sum to the families as expected. Instead, Prudential Financial Inc. would withhold lump-sum payments of life insurance benefits for survivors of fallen service members. The families, which were entitled to lump sums, were simply given checks to draw down on the amounts owed.
Prudential held $662 million of survivors’ money in its corporate general account as of June 30, according to information provided by the VA. Prudential’s general account earned 4.2 percent in 2009, mostly from bond investments, according to regulatory filings. The company has paid survivors holding Alliance Accounts 0.5 percent in 2010. This is financial greed at its worse. The company earned 3.7% on other people’s money.
If you know someone in this situation, have them contact us. The victims of this greed need to consider a class action to make Prudential pay the ill-gotten gains to the families of our fallen American heroes.